Company Formation in Latvia

Company formation in Latvia, the un-official capital of the Baltic States, is simple as our legal team takes care of all documentation for the full setup. We offer a wide range of corporate services in Latvia tailored to fit your needs, including but not limited to company formation, legal and tax advisory, bank account opening, virtual office and accounting. There is also availability for Latvian shelf companies with previous activity (e.g. older registration dates) and active VAT registrations. Most of our services are available with an optional remote setup package (no visit required). We can provide you with a turnkey solution with all the support services.

The most time and cost efficient approach to register a company in Latvia is to purchase a new shelf company, because the founding process can be a challenge to non-residents due to various hidden requirements (e.g. share capital payment). In most cases, non-residents opt for a tailor-made shelf company to avoid bureaucracy as we have already taken care of all requirements. However, we do assist with new incorporations on request. We will help you to choose the best approach according to your objectives. Latvian company formation pricing starts from 980 EUR, for more information contact us for consultation and a detailed price quote »

Company in Latvia

Company Formation in Latvia
Priced from 980 euros
Remote setup in 1 to 5 days
e-Residency supported
VAT active companies available

Limited Liability Company in Latvia

The Latvian limited liability company (Sabiedriba ar ierobezotu atbildibu or SIA in Latvian) is the most common form of business as its shareholders have no personal proprietary liability for the company’s obligations. Our new limited liability shelf companies are registered in the Commercial Registry with an active registration number and no previous activity – in some cases we also create the new company as tailor-made according to your order. Our new Latvian shelf companies come with our 100% clean balance sheet guarantee and the full share capital payment of 2800 EUR pre-registered, hence there is no need to put up the share capital. There are no restrictions on the number or the nationality of the shareholder(s) and board member(s).

The Latvian company setup can be carried out remotely with a Power Of Attorney (PoA) issued to us, digitally with an electronic-signature (applicable for a number of European Union ID card holders, inc. Estonian e-Residents) or by scheduling a notary appointment. Depending on the project we propose the most optimal solution. We prepare the legal documentation and submit all applications – we only require the basic information from your side to fill and submit the documents. After the Latvian Commercial Registry has processed all changes we forward the full legal documentation to you. It usually takes 2-5 business days for the registry to update their database to show the new shareholder(s), board member(s) and company information.

Step 1: Get in touch for consultation
Let us know of your target objectives and we propose the best solution for your consideration. Preliminary consultation and detailed price quotes are free of charge.

Step 2: We take care of everything
We collect necessary information from you, prepare all documentation and forward for your confirmation.

Step 3: Start business in Latvia
We take care of all applications and set up any corporate services needed. We notify you when the process if finalized and when your Latvian company is ready for business.

Corporate Services in Latvia

We provide a full range of corporate services in Latvia including legal and tax advisory, virtual offices, accounting and bank account opening support. Secretary and nominee services on request.

Our virtual office service is a flexible solution for companies who do not need a physical office in Latvia. Our legal address in Riga will be used for registering with the Commercial Registry and as the administrative address for the company to receive postage. The postage sent to your company will be forwarded to you by e-mail (scanned copy) or by regular mail on request. We can also set up individual local telephone and fax numbers as well as a local domain name with web hosting for your company.

Our accounting department can take care of all of your Latvian company bookkeeping, as well as consult about financial and tax questions. The monthly cost of bookkeeping depends on the company profile, for example on the number of transactions and payroll calculations. We can also provide the VAT registration form and assistance with its completion. Financial statements have to be submitted annually while VAT returns and social tax declarations have to be submitted monthly.

We work with several Latvian banks (e.g. Rietumu Banka and BlueOrange) to ensure the most time efficient opening of a business bank account for company in Latvia. To set up the bank account, a management board member has to be present for a face to face meeting during the first application stage. The payment card and online banking security token are received in the second stage. Our team member can be appointed to receive these on your behalf. Our compliance team will consult on choosing the best bank for your business and provide support through the account opening process.

It is also possible to open a fully functioning business bank account with an individual IBAN and with a VISA payment card for your company in Latvia, remotely over the Internet. We have covered this option in our Knowledge Center: Online bank account with IBAN and payment card

A limited review is required for small undertakings which on their balance sheet dates (for two consecutive years) exceed at least two of the three following criteria:

  • Balance sheet total of 400 000 – 800 000 euros
  • Net turnover of 800 000 – 1 600 000 euros
  • Average number of 25 – 50 employees during the financial year

* Limited review of the annual statement is a review engagement carried out by sworn auditor or commercial company of sworn auditors in accordance with the Audit Services Law in respect of the data indicated in the financial statement and information included, including the conformity of the enterprise income tax amounts. In order to examine the conformity of the undertaking’s income tax amounts the Latvian Association of Sworn Auditors has adopted specific national regulation.

The statutory audit is required for small undertakings which on their balance sheet dates (for two consecutive years) exceed at least two of the three following criteria:

  • Balance sheet total of 800 000 euros and more
  • Net turnover of 1 600 000 euros and more
  • Average number of 50 employees during the financial year

Taxation Basics in Latvia

The Latvian corporate tax rate on reinvested profit is 0%, i.e. all undistributed corporate profits are tax exempt. The income tax at a rate of 20% is charged on gross dividends. The general VAT rate is 21%.

Latvian corporate profits are not taxed (tax rate 0%) until the profits are distributed as dividends. In other words, all undistributed corporate profits are tax-exempt. This exemption covers both active (e.g. trading) and passive (e.g. dividends, interest, royalties) types of income, as well as capital gains from sales of all types of assets, including shares, securities, and immovable property.

Latvia levies a corporate withholding tax only on profits that are distributed as dividends, share buybacks, capital reductions, liquidation proceeds or deemed profit distributions. Distributed profits are generally subject to the 20% CIT at 20/80 of the net amount of profit distribution. From the Latvian perspective, this tax is considered a CIT and not a withholding tax (WHT), so the tax rate is not affected by an applicable tax treaty.

Standard VAT rate (in Latvian pievienotas vertibas nodoklis, PVN) is 21% and applies to all supplies of goods and services not qualifying for a reduced rate. Lower rates of VAT are applied to particular goods and services – 12% (food products for infants; pharmaceutical products; medical products for disabled persons; domestic passenger transport; books (excluding e-books); newspaper and periodicals; hotel accommodation; district heating) or 0% (e.g. export operations), as well as exemption from VAT (e.g., financial services, insurance, education, public health and others). It is required to register with the Tax and Customs Board as a VAT payer if the annual taxable turnover exceeds 40 000 EUR for domestic business. The distance sales threshold for Latvia is 35 000 EUR.

Employers registered in Latvia (including permanent establishments of the foreign entities) must pay social tax on all payments made to employees. The rate of social tax is 24.09%. Minimum wage in Latvia is 430 EUR/month as of 2019 and the requirement is applied if monthly net turnover exceeds 2150 EUR, excluding the first year of registration.

The Latvian Micro-business Tax (MBT) Act gives existing and newly-formed businesses the opportunity of acquiring micro-business status and registering if they meet the following criteria:

  • The shareholders are individuals.
  • The turnover does not exceed EUR 40 000 in a calendar year.
  • The number of employees does not exceed five at any time.
  • Members of the board are concurrently employees of the MBT payer.
  • Remuneration of each MBT payer employee does not exceed EUR 720 per month.

The MBT tax rate is 15%. The standard MBT rate is based on a turnover up to EUR 40 000, and covers payroll taxes, business risk duties, and CIT.

Questions? Let us know!

Questions regarding company formation in Latvia will be promptly answered by contacting us through the form below. Our legal team will respond shortly with more information to address your case.

Interested in starting a business in Latvia? Our legal team will guide you through the process!

In the first step please let us know of your objectives for setting up a company in Latvia. In the second step we propose the best solution with a step-by-step overview and a detailed price quote for company formation in Latvia. In the third step we take care of all legal documentation and applications.